You work for an organization that provides loans to businesses. You are working
ID: 2814191 • Letter: Y
Question
You work for an organization that provides loans to businesses. You are working with a client who is requesting a loan that will require a review of financial and related performance documents. You have been asked to review the documents and summarize your findings in a loan recommendation for your management team.
- There were no changes in the number of shares of common stock during 2017, 2016, or 2015.
- There are no shares of preferred stock. There are no stock options, convertible debt, or other possible sources of common stock.
Can you please provide some insight on what this Data means and whether it is significant.
Explanation / Answer
To give a loan to businesses financial statements are like report cards. Financial statements gives a track on business money. i.e sources of funds , where they have been used and its current status. Financial Statements needed-
Common stock is recorded under liabilities of a Balance Sheet. Stock options, preferred stock and common stocks are all recorded under the Shareholder's equity. As we know a Balance Sheet shows what company owns in the asset side and what company owes in the liability side the liability side of the balance sheet can tell how much loan or debt you have to pay.
A constant number of share of common stock means the share holders own the same number of share for three years. that means the company is maintaining a balance in assets and liabilities. There is no convertibles debts that means the compant has no long term debts to pay. There is no stock option and preferred stocks. so the shareholders equity is maintained near about constant according to the information given.
as there is no details available in this question, above explanations can be iven about this question.
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